Sprouts Enjoys Strong Q4, FY18
Sprouts Farmers Market enjoyed a strong quarter four and overall year for its fiscal 2018, which ended Dec. 30, 2018.
During the quarter, net sales grew to $1.3 billion, an 11 percent rise compared with the same period in 2017. This was driven by a 2.3 percent increase in comparable-store sales and strong performance in new stores opened.
Gross profit, meanwhile, increased 11 percent to $421 million, which resulted in a gross profit margin of 33.2 percent – a decrease of 15 basis points compared with the same period a year prior. The primary driver here was promotional activity, which slightly pressured margins, along with rising distribution and transportation costs.
For the full year, net sales were $5.2 billion, a 12 percent increase over fiscal 2017. Growth here was driven by a 2.1 percent increase in store comps and strong performance in new stores opened.
Gross profit for the year increased 12 percent to $1.7 billion, resulting in a gross profit margin of 33.6 percent, which is flat compared with 2017. This primarily reflects the benefit of the grocer's strategic initiatives and merchandising strategies offsetting the promotional environment.
"Sprouts delivered 12 percent net sales growth for the year in a competitive and evolving industry, demonstrating the strength of our differentiated model and brand,” said Brad Lukow, interim co-CEO and CFO of Sprouts. "Through our solid operating cash flows, we continue to self-fund our store unit growth and strategic initiatives and, in keeping with our capital structure strategy, returned more than $250 million to our shareholders through share repurchases in 2018."
Added Jim Nielsen, interim co-CEO, president and COO of Sprouts: "Our focus on health, value, selection and service continues to produce solid financial returns, supporting our ongoing expansion that allows Sprouts to reach new customers and markets, positioning us well for long-term growth. We remain focused on building upon our strategic initiatives in people, systems and product innovation to drive continued enhancements to our experience, reinforcing Sprouts as a trusted brand for health and value."
During Q4, Sprouts opened two new stores: one each in Florida and Nevada. For the year, it opened 30 new stores and closed two stores, resulting in a total of 313 stores in 19 states as of Dec. 30.
As for fiscal 2019, Sprouts anticipates 9 percent to 10.5 percent net sales growth, 1.5 percent to 3 percent store comps growth, and approximately 28 new stores.
With headquarters in Phoenix, Sprouts Farmers Market employs more than 30,000 team members and operates in 300-plus stores in 19 states from coast to coast. The company is No. 22 on Progressive Grocer's 2019 Super 50 list of the top grocers in the United States.
